Abstract

One of the purposes of the Labour Relations Act (LRA) is to promote collective bargaining at sectoral level. Bargaining councils and the extension of their agreements are indispensable to central bargaining, but during the past few years these extensions to non-parties have come under increased pressure from different angles. It was first argued in the courts that specific extensions were invalid and unlawful; secondly that the provisions of the LRA regarding extensions are unconstitutional; and thirdly, as part of the broader debate, that these extensions are detrimental to the economy.

The aim of this article is to examine the arguments against the extension of bargaining council agreements and to propose certain recommendations. The movement in European countries away from central bargaining to decentralised bargaining in order to promote economic stability in the wake of the financial crisis will also be discussed to establish whether there is any guidance to be found in the measures taken in these countries.